The interesting thing about YouTube revenue, however, is how
little of it the stars themselves get to keep. YouTube keeps a
45% cut of any ad revenue gathered by one of your videos. And
that's before taxes and your own operating and editing costs.

But ... PewDiePie is probably making a lot less
than that after YouTube and taxes take their cut. Here's the
math:

PewDiePie total revenue:
$10.5 million

After YouTube's 45% cut:
$5.775 million

After taxes @30% after
YouTube's cut: $4.0425 million

Net income: $4 million,
roughly

OK, that's still pretty good.

But most YouTube stars are not PewDiePie.

Michelle
Phan.YouTube

Michelle Phan is a hugely famous YouTube star for her makeup
tutorials. Statsheep estimates
she'll earn $126,000 in the next four months based on her
recent history, or $378,000 a year. Again, not bad, but let's
look at that after taxes and Google's YouTube fees:

But before you buy a videocamera and tell your boss to shove it,
consider what it costs to become a YouTube star. Turns out you
can be one of the most famous people on the web and still barely
get by.

Olga Kay.

The
New York Times profiled Olga Kay, another YouTube star who (like
Marbles) does self-deprecating monologues on female American
life. It's a great story if you want some hard numbers on the
costs and revenues of being internet famous.

And because Kay isn't a massive star like PewDiePie and Phan, it
gives you an idea of what you're reasonably likely to make as a
YouTube star with a moderate sized fanbase:

Kay has earned $100,000 to $300,000 in each of the last three
years. She has 1 million subscribers. That number is merely the
gross revenue, however.

She makes 20 videos a week, all of which are filled with ads
via Google's automated YouTube partners program.

Kay likely gets about $7.60 per 1,000 ad views, down from
$9.35 in 2012, according to TubeMogul, which buys and sells video
ads.

Ads are only run on a minority of videos shown. Roughly, a
video creator will earn $2,000 for every million views. "And then
YouTube takes 45 percent," the Times notes. (The IRS will take
its cut of the remainder, too.)

Kay spends $500-$700 a week on editing costs.

In other words, Kay is probably getting by on less than 50% of
what her videos make in gross revenue. If she earns $100,000
year, she might be looking at as little as $13,500 annually,
after YouTube's cut, taxes and editing costs, according to our
back-of the-envelope math:

We presume Kay's real numbers are a little more optimistic than
that — otherwise why bother? She can write off her expenses
against her income, for instance. (The
first time we wrote about her, we estimated she might take
home $21,000 annually. Either way, it's a modest living.)

We were huge fans of YouTube ... but we are not creating content
anymore because it’s simply not sustainable. YouTube is an
awesome place to build a brand, but it is a horrible place to
build a business.